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LA313CommercialLawCases

[HOUSEOFLORDS.]

MACAURA
APPELLANT

AND

NORTHERNASSURANCECOMPANYLIMITED,
ANDOTHERS
RESPONDENTS

H.L.(In.)*
1925April3

*Present:LORDBUCKMASTER,LORDATKINSON,LORDSUMNER,LORD
WRENBURY,ANDLORDPHILLIMORE

Insurance(Fire)InsurableInterestOnemanCompanySole
ShareholderandCreditorinsuringAssetsofCompany.

Neitherashareholdernorasimplecreditorofacompanyhasany
insurableinterestinanyparticularassetofthecompany.

Patersonv.Harris(1861)1B.&S.336andWilsonv.Jones(1866)
L.R.1Ex.193(1867)L.R.2Ex.139discussed.

DictumofWaltonJ.inMoran,Galloway&Co.v.Uzielli[1905]2K.B.
555,562approved.

Theownerofatimberestatesoldthewholeofthetimberthereontoa
timbercompanyinconsiderationoffullypaidupsharesinthe
company.Subsequentlybypolicieseffectedinhisownnamewith
severalinsurancecompaniesheinsuredthistimberagainstfire.The
greaterpartofthetimberhavingbeendestroyedbyfire,hesuedthe
insurancecompaniestorecovertheloss,buttheactionswerestayed
andthematterwasreferredtoarbitrationinpursuanceoftheconditions
containedinthepolicies.Theclaimantwasthesoleshareholderinthe
companyandwasalsoacreditorofthecompanytoalargeextent.The
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arbitratorheldthattheclaimanthadnoinsurableinterestinthegoods
insuredanddisallowedtheclaim:

Held,(1.)thattheclaimanthadnoteitherasshareholderorcreditorany
insurableinterestinthegoods(2.)thattheclaimanthavingallowedthe
pointofwantofinsurableinteresttoberaisedbeforethearbitrator
withoutobjection,itwasnotopentohimtocallinquestionthe
authorityofthearbitratortoentertainit.

APPEALfromanorderoftheCourtofAppealinNorthernIrelandaffirmingan
orderoftheKing'sBenchDivisionuponanawardofanarbitratorstatedintheform
ofaspecialcase.

ByanindenturedatedDecember30,1919,theappellant,whowastheownerofthe
KillymoonestateincountyTyronewiththetimberthereon,agreedtoselltothe
IrishCanadianSawMills,Ld.,allthetimber,bothfelledandstanding,ontheestate
for27,000l.,tobepaidinfullypaidupsharesoftheCanadiancompany,andin
additiontheactualcostincurredbytheappellantinfellingthetimberalreadyfelled,
tobepaidincashorsharesattheoptionoftheappellant.Byafurtherindentureof
thesamedatetheappellantgrantedtotheCanadiancompanyleaveandlicencefor
theperiodofoneyeartoenterupontheestateandtouseallmillsontheestatefor
thepurposeofsawingthetimberthereon.Inpursuanceofthefirstindentureof
December30,42,000fullypaid1lsharesintheCanadiancompanywereallottedto
theappellantorhisnominees,27,000sharesinrespectofthepurchasepriceand
15,000sharesinrespectofthecostoffellingthetimber.Theseweretheonlyshares
issuedbythecompany,andtheyhadalwaysbeenheldbytheappellantorbyhis
nomineesforhisbenefit.Exceptsomechattelsofsmallvalue,theonlyassetsofthe
Canadiancompanywerethesaidtimberandthelicencegrantedbythesecond
indentureofDecember30,1919.

InAugust,1921,theCanadiancompanyhadcompletelyfelledandsawnallthe
timberontheestate,andthesawmillswerepartiallydismantled.

Atthetimeofthepoliciesofinsurancehereinaftermentionedthetitledeedsofthe
KillymoonestateweredepositedwiththeBankofIrelandtosecureanoverdraftby
theappellant.

ByapolicyofinsurancedatedFebruary6,1922,madeinthenamesoftheappellant
andthebankfortheirrespectiverightsandintereststherespondents,theNorthern
AssuranceCompany,insuredagainstfirealltimberontheKillymoondemesnenot
within100yardsofanysawmillfortensixtiethsof30,000l.Similarinsurances
wereeffectedwithfourotheroffices,whowerealsorespondentstothisappeal.

Attherespectivedatesoftheissueofthesepoliciestheappellantwasacreditorof
theCanadiancompanytotheextentof19,000l.

OnFebruary22,1922,thegreaterpartofthetimberontheestatewasdestroyedby
fire.

InJune,1922,theappellantandthebankinstitutedfiveactionsintheKing'sBench
DivisioninNorthernIrelandagainsttheseveralofficesfortherecoveryofmoneys
allegedtobedueunderthepolicies.ButattheinstanceofthedefendantstheCourt
orderedthatallproceedingsintheactionsshouldbestayedandthatthemattersin
disputeshouldbereferredtoarbitrationinpursuanceoftheseveralconditionsin
thatbehalfcontainedinthepolicies,andanarbitratorwasappointed.

Thearbitrator,byanawardstatedintheformofaspecialcase,awarded(1.)thatthe
appellanthadnotatanytimeduringthecurrencyofthepoliciesanyinsurable
interestinthetimberthesubjectmatterofthepolicies(2.)thatthetimberwasnot
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atthetimeofburningwithin100yardsofasawmillwithinthemeaningofthe
policies.

Noquestionaroseuponthesecondlimboftheaward.TheDivisionalCourtupheld
theawardandtheirdecisionwasaffirmedbytheCourtofAppealinNorthern
Ireland(AndrewsandMooreL.JJ.).

1925.March6,9.SerjeantSullivanK.C.(oftheIrishandalsooftheEnglishBar)
andM.F.Healy,(oftheIrishBar)(withthemIvorGrantham(oftheEnglishBar))
fortheappellant.Byobtainingastayoftheactionsinordertohavetheappellant's
claimsreferredtoarbitrationinpursuanceofthetermsofthepoliciesthe
respondentsprecludedthemselvesfromputtingforwardanydefencewhichavoided
thepolicies,fortheavoidanceofapolicyinvolvestheavoidanceofthearbitration
clausewhichispartofthepolicy.Theywereestoppedfromdenyingthatthe
policieswerevalidindemnitiesagainsttheactuallosssustained:Jureidiniv.
NationalBritishandIrishMillersInsuranceCo.(1)Ballastyv.Army,Navyand
GeneralAssuranceAssociation(2)JohannesburgMunicipalCouncilv.Stewart&
Co.(3)YorkshireInsuranceCo.v.Craine(4)andseeStebbingv.Liverpooland
LondonandGlobeInsuranceCo.(5)Inasmuchasthewantofinsurableinterestisa
questiongoingtotherootofthecontractthearbitratorhadnojurisdictionto
entertainit.

[LORDBUCKMASTER.NoquestionofestoppelwasbeforetheCourtofAppeal
inNorthIreland.Theappealwasupontheaward,notagainstthearbitration.There
wasnoappealonthegroundthatthearbitratorhadnopowertomaketheaward.
Thereforethispointisnotopentotheappellant.]

Assumingthatthearbitratorhadpowertodealwiththisquestion,hewaswrongin
holdingthattheappellanthadnoinsurableinterestinthistimber.Legalownership
isnotnecessaryforinsurableinterest.Sotoconfineitwouldbeaddingarestriction
toacontractofinsurancewhichdoesnotariseoutofitsnature.Tobeinterestedin
thepreservationofathingistobesocircumstancedwithrespecttoitastohave
benefitfromitsexistence,prejudicefromitsdestruction.Ifthereisalegalcertainty
oflossarisingfromthedestructionofthepropertyinsuredthenthereisaninsurable
interest:Lucenav.Craufurd(6)M'Swineyv.RoyalExchangeAssurance(7)Lloydv.
Fleming(8)Ebsworthv.AllianceMarineInsuranceCo.(9)Inglisv.Stock.(10)Thisis
acaseofasoleshareholderdealingwithpropertycreatedbyhismoney,andthere
canbenoquestionthathehasaseriousinterestinfactinthispropertytheonly
questioniswhetherhehasaninsurableinterestinit.Ashareholderinacompanyis
entitledtoinsurethegoodsofthecompanytotheextentofhisholdinginorderto
protectthevalueofhisshares:Patersonv.Harris(11)Wilsonv.Jones.(12)Further,
inthespecialcircumstancesofthiscase,theappellanthadaninsurableinterestin
thistimberascreditorofthecompany,forhewastheonlysubstantialcreditorand
thecompanyhadnootherassetsoutofwhichthedebtcouldbepaid.Itissettled
thatacreditormayinsurehisdebtor'slifetotheextentofhisdebt,becauseofthe
probabilitythatifthedebtorcontinuestolivehewillearnthemoneytopaythe
debt:Godsallv.Boldero.(13)Tosucceed,thecreditormustprovethatthelosswasat
allmaterialtimesinevitable,buttheappellanthasdischargedthatonus.Thedictum
ofWaltonJ.inMoran,GallowayCo.v.Uzielli(14),whichmayappeartobeopposed
totheappellant'sclaimquacreditor,proceedsontheviewthatthecreditorinthat
casehadfailedtoprovethathisdebtor,ashipowner,wasunabletopaythedebt
unlessherecoveredtheship.Theappellantwasboundtobenefitbythepreservation
ofthesubjectmatteroftheinsuranceandboundtosufferlossbyitsdestruction,and
theactuallossbothoftheamountofhisdebtandofthevalueofhisshareswasthe
directandinevitableresultofthehappeningoftheperil.Heisthereforeentitledto
recoveronthepolicies.
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[CounselalsoreferredtoBarclayv.Cousins(15)Crowleyv.Cohen(16)Marksv.
Hamilton(17)Watersv.MonarchLifeAssuranceCo.(18)LondonandNorthWestern
Ry.Co.v.Glyn(19)Andersonv.Morice(20)ColonialInsuranceCompanyofNew
Zealandv.AdelaideMarineInsuranceCo.(21

SirJohnSimonK.C.,S.L.BrownK.C.,E.S.MurphyK.C.andW.Lowry(thelast
threeoftheIrishBar)fortherespondentswerenotcalledupon.

TheHousetooktimeforconsideration.

1925.April3.LORDBUCKMASTER.MyLords,theappellantistheownerof
theKillymoonestateinthecountyofTyrone.Therespondentsarefiveinsurance
companieswithwhomatvariousdatesinJanuaryandFebruaryof1922,the
appellanteffectedinsuranceagainstfireontimberandwoodgoodsintheopen
situateontheKillymoondomainnotwithinahundredyardsofanysawmillorany
buildinginwhichwoodworkingbypowerotherthanwindorwaterwascarriedon.
Neithertheamountsnortheexactlanguageofthepoliciesarematerialforthe
purposesofthepresentappeal,noristhefactthatthepolicieswerereallyeffectedin
thenameoftheappellantandtheGovernorandtheCompanyoftheBankof
Ireland,fortherealquestionsthatarisefordeterminationarethese:

1.Whethertheappellanthadanyinsurableinterestinthegoodsthe
subjectofthepolicies,and

2.Whethertherespondentswere,inthecircumstances,atlibertyto
raisethecontentionthathehadnosuchinterestinthemannerinwhich
itwasraisedinthecourseoftheseproceedings.

Thehistoryofthemattercanbestatedinafewsentences.Theappellantupon
whoseestatethetimberinquestionwasoriginallystandingonDecember30,1919,
assignedthewholeofittoacompanyknownastheIrishCanadianSawMills,Ld.,
theamounttobepaidforthetimberfelledandunfelledbeing27,000l.,whilea
further15,000l.wastobepaidforthecostincurredbytheappellantinfellingthe
timberthatwasthendown.Thetotalpricepaidwastherefore42,000l.,satisfiedby
theallotmenttotheappellantorhisnomineesof42,000l.fullypaid1l.sharesinthe
companynofurthersharesthanthesewereeverissued.Thecompanyproceeded
withtheoperationsofcuttingthetimber,andbytheendofAugust,1921,ithadall
beenfelledandsawnupinthesawmills.Inthecourseoftheseoperationsthe
appellanthadbecomethecreditorofthecompanyfor19,000l.,andbeyondthisitis
statedthatthedebtsofthecompanyweretriflinginamount.Thetimberwhencut
remainedlyingontheappellant'sland,andonFebruary22,1922,thegreaterpartof
itwasdestroyedbyfire.Theappellantaccordinglyclaimedagainstthecompanies
uponthepoliciesand,onMay30,1922,inananswersentonbehalfofallthe
companies,itwasstatedthatthecompaniesmustdeclinetoacceptliabilityforthe
lossofanytimberwithinahundredyardsofthesawmill.Theappellantandthe
BankofIrelandaccordinglyinstitutedproceedingsbyissuingwritsagainsteachof
therespondentcompanies,andeachofthestatementsofclaimdeliveredcontained
thefollowingallegation:"3.Theplaintiffswereatthedateoftheeffectingofthe
saidpolicyofinsuranceandatthetimethelossanddamagehereinaftermentioned,
interestedinthesaidtimbertotheamountsoinsuredthereonasaforesaid."

Onproductionsofthepoliciesalltheseactionsmusthavebeendismissed,since
eachpolicycontainedaclausereferringalldisputestoarbitrationandmakingthe
awardofthearbitratoraconditionprecedenttoanyliabilityonthepartofthe
companies.Insteadofpleadingthisasadefencethecompaniesappliedtostaythe
actionsandreferthemattersindisputetoarbitration,andonJuly21,1922,anorder
wasmadetothateffect.Uponthehearingof.thearbitrationseveralchargesoffraud

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anddishonestyweremadeagainsttheappellant,allofwhichfailed,anduponthe
pointinitiallyraisedinthelettertowhichreferencehasbeenmadethearbitrator
decidedintheappellant'sfavour,butheheldthatinthecircumstancestheappellant
hadnoinsurableinterestinthetimber,andthisviewhasbeensupportedinthe
CourtofKing'sBenchand.intheCourtofAppeal.

Thequestionastothecompetencyofthearbitratortodeterminethedisputeastothe
insurableinterestoftheplaintiffonlyarisesifnosuchinsurableinterestcanbe
recognizedbythelaw,anditisthispointthereforethatfirstrequiresconsideration.
Itmust,inmyopinion,beadmittedthatatfirstsightthefactssuggestthatthere
reallywasnopersonotherthantheplaintiffwhowasinterestedinthepreservation
of.thetimber.Itistruethatthetimberwasownedbythecompany,butpractically
thewholeinterestinthecompanywasownedbuytheappellant.Hewouldreceive
thebenefitownedofanyprofitandonhimwouldfall,theburdenofanyloss.But
theprinciplesonwhichthedecisionofthiscaserestsmustbeindependentofthe
extentoftheinterestheld.Theappellantcouldonlyinsureeitherasacreditororasa
shareholderinthecompany.Andifhewasnotentitledinvirtueofeitherofthese
rightshecanacquirenobetterpositionbyreasonofthefactthatheheldboth
characters.Asacreditorhispositionappearstomequiteincapableofsupportingthe
claim.Ifhiscontentionwererightitwouldfollowthatanypersonwouldbeat
libertytoinsurethefurnitureofhisdebtor,andnosuchclaimhaseverbeen
recognizedbytheCourts.ItistruethatsincethecaseofGodsallv.Boldero(22),
whereacreditorofMr.Pittwasheldentitledtoeffectaninsuranceuponhislife,
thisinterestofacreditorhasalwaysbeenrecognizedassufficienttosupportalife
policy,butthisdepends,aswassaidbyLordEllenborough,uponthemeansand
probabilityofpaymentwhichthecontinuanceofadebtor'slifeaffordstohis
creditorsandtheprobabilityoflosswhichwouldresultfromhisdeath.Inthecase
ofMoran,Galloway&Co.v.Uzielli(23),whereacreditorforships'necessarieswas
heldentitledtoinsuretheship,thedecisionresteduponthefactthatthecreditorhad
arightinremagainstthevessel,andthelearnedjudgesaidthat"insofarasthe
plaintiffs'claimdependsuponthefactthattheywereordinaryunsecuredcreditors
oftheshipownersforanordinaryunsecureddebt,Iamsatisfiedthatitmustfail.
Theprobabilitythatifthedebtor'sshipshouldbelosthewouldbelessabletopay
hisdebtsdoesnot,inmyjudgment,givetothecreditoranyinterest,legalor
equitable,whichisdependentuponthesafearrivaloftheship."Thisis,inmy
opinion,anaccuratestatementofthelaw,andtheappellantthereforecannot
establishhisclaimascreditor.

Turningnowtohispositionasshareholder,thismustbeindependentoftheextentof
hisshareinterest.Ifhewereentitledtoinsureholdingallthesharesinthecompany,
eachshareholderwouldbeequallyentitled,iftheshareswereallinseparatehands.
Now,noshareholderhasrighttoanyitemofpropertyownedbythecompany,forhe
hasnolegalorequitableinteresttherein.Heisentitledashareintheprofitswhile
thecompanycontinuestocarryonbusinessandashareinthedistributionofthe
surplusassetswhenthe.companyiswoundup.Ifhewereatlibertytoeffectan
insuranceagainstlossbyfireofanyitemofthecompany'sproperty,theextentof
hisinsurableinterestcouldonlybemeasuredbydeterminingtheextenttowhichhis
shareintheultimatedistributionwouldbediminishedbythelossoftheasseta
calculationalmostimpossibletomake.Thereisnomeansbywhichsuchaninterest
canbedefinitelymeasuredandnostandardwhichcanbefixedofthelossagainst
whichthecontractofinsurancecouldberegardedasanindemnity.Thisdifficulty
wasrealizedbycounselfortheappellant,whoreallybasedhiscaseuponthe
contentionthatsuchaclaimwasrecognizedbyauthorityanddependeduponthe
properapplicationofthedefinitionofinsurableinterestgivenbyLawrenceJ.in
Lucenav.Craufurd.(24)IagreewiththecommentofAndrewsL.J.uponthiscase.I
findequallywithhimadifficultyinunderstandinghowamoralcertaintycanbeso
definedastorenderitanessentialpartofadefinitelegalproposition.Inthepresent
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case,thoughitmightberegardedasamoralcertaintythattheappellantwould
sufferlossifthetimberwhichconstitutedthesoleassetofthecompanywere
destroyedbyfire,thismoralcertaintybecomesdissipatedandlostiftheassetbe
regardedasonlyoneinaninnumerablenumberofitemsinacompany'sassetsand
theshareholdinginterestbespreadoveralargenumberofindividualshareholders.
TheauthoritieswhichhavetheclosestrelationtothepresentarethoseofPaterson
v.Harris(25)andWilsonv.Jones.(26)Inthefirstofthesecasesashareholderina
companythatwasestablishedforthepurposeoflayingdownasubmarinecable
betweentheUnitedKingdomandAmerica,effectedaninsuranceuponhisinterest
inthecable.Theshareholder'sinsurableinterestinthecabledoesnotappearto
havebeendisputedandtherealquestion,therefore,wasneverargued.Inthecaseof
Wilsonv.Jones(27),whereanotherpolicywaseffectedbyashareholderinthesame
company,itwasdistinctlyheldthatthepolicywasnotuponthecablebutuponthe
shareholder'sinterestintheadventurethecablebeingsuccessfullylaid.Itwas
attemptedbytheunderwriterstolimittheinsurancetoaninterestinthecableitself,
whichwouldhavelessenedtherisk,butitwasheldthatthiswasnotthetrue
constructionofthepolicy.Itwasnotarguedthat,ifitwere,theshareholderhadno
interesttoinsure,butbothMartinB.intheCourtofExchequerandWillesJ.inthe
ExchequerChamber,statedthattheplaintiffhadnodirectinterestinthecableasa
shareholderinthecompany,and,sofarasIcansee,thisconsiderationitwasthat
assistedtheCourtindeterminingthattheinsurancewasupontheadventurein
whichtheshareholderhadaninterest,andnotuponthecableinwhichhehadnone.
Therearenoothercasesthatevenapproximatelyapproachthepresentcase,and,
properlyregarded,IthinkthecaseofWilsonv.Jones(27)isagainstandnotinfavour
oftheappellant'scontention.Uponthemeritsofthisdispute,therefore,theappellant
mustfail.Neitherasimplecreditornorashareholderinacompanyhasany
insurableinterestinaparticularassetwhichthecompanyholds.

Norcanhisclaimtoinsurebesupportedonthegroundthathewasabaileeofthe
timber,forinfactheowednodutywhatevertothecompanyinrespectofthesafe
custodyofthegoodshehadmerelypermittedtheirremaininguponhisland.

Theremainingcontentionscanbebrieflydealtwith.TheletterofMay30certainly
creatednoestoppel,nordidtheapplicationtorefertoarbitration.Whetherthe
arbitratorhadpowerwithoutconsenttodeterminethatthepolicywasvoidbecause
oflackofinsurableinterestdoesnotappeartometoarise.Thetimeforthe
appellanttotakethisobjectionwaswhentheorderforreferencewasmade,forone
oftheallegationsinissuewasthestatementthathepossessedaninsurableinterest
noristhereanysubstanceinthecontentionthathewasledbythedefendantsto
believetheonlyquestiontobereferredwastheconstructionofthepolicy.

Inanyeventafurtheropportunitywasofferedtohimuponthequestionbeingraised
beforethearbitrator,forhecouldthenhaveraisedhiscontentiononanapplication
tostaythearbitrationbut,infact,thepointwasfullyarguedbeforethearbitrator,
whowasaskedbyappellant'scounseltostateacaseuponit.OnDecember13,
1922,theappellantservedanoticeofmotionseekingtohavetheawardsetaside,
andonJanuary8afurthernoticeofmotionwasservedaddingasanadditional
groundforreliefthatthearbitrator'sjurisdictionwasterminatedbyrepudiationof
thepolicyonthegroundsoffraudputforwardbythedefendants.Thenoticeof
motionisnotinthedocumentsbeforetheHouse,butitwouldappearfromthis
statementthatneithernoticeofmotionraisedtheparticularpointthatisnowrelied
upon.TheCourtoftheKing'sBenchDivisiondecidedagainsttheappellant,andhis
noticeofappealtotheCourtofAppealaskedonlythefollowingrelief,namely:that
questionNo.1intheawardshouldbeansweredintheaffirmativeandquestionNo.
2inthenegativeandthejudgmentoftheKing'sBenchshouldbereversed.Now,
questionNo.1wasthequestionastowhethertheappellanthadanyinsurable
interestinthetimber,anditwasthisquestionwhichtheappellanthimselfinvited

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theCourtofAppealtodecideinhisfavour.Afterthisitisimpossibleforhimtosay
thatthereisnoproperdecisionuponthematterandthatthewholeproceedingsare
void.NordidheraiseagainbyhisnoticetotheCourtofAppealthequestionthat
thearbitrator'sjurisdictionwasterminatedbythechargesoffraud.Itwould,indeed,
havebeenfoolishtodoso,forthosequestionswerealldecidedinhisfavour.The
questionthereforeastotheauthorityofthearbitratortodecidethepointasto
insurableinterestisnolongeropentotheappellant,butifitwere,Iagreewiththe
viewsexpresseduponitbyMooreL.J.intheCourtofAppeal.ForthesereasonsI
amofopinionthatthisappealmustfailandshouldbedismissedwithcosts.

LORDATKINSON.MyLords,Ihavehadthepleasureandadvantageofreading
thejudgmentwhichhasjustbeendeliveredbymynobleandlearnedfriendonthe
Woolsack.Iapproveofitandhavenothingtoadd.

LORDSUMNER.MyLords,thisappealrelatestoaninsuranceongoodsagainst
lossbyfire.Itisclearthattheappellanthadnoinsurableinterestinthetimber
described.Itwasnothis.ItbelongedtotheIrishCanadianSawmills,Ltd.,of
Skibbereen,co.Cork.Hehadnolienorsecurityoveritand,thoughitlayonhis
landbyhispermission,hehadnoresponsibilitytoitsownerforitssafety,norwasit
thereunderanycontractthatenabledhimtoholditforhisdebt.Heownedalmost
allthesharesinthecompany,andthecompanyowedhimagooddealofmoney,
but,neitherascreditornorasshareholder,couldheinsurethecompany'sassets.The
debtwasnotexposedtofirenorweretheshares,andthefactthathewasvirtually
thecompany'sonlycreditor,whilethetimberwasitsonlyasset,seemstometo
makenodifference.Hestoodinno"legalorequitablerelationto"thetimberatall.
Hehadno"concernin"thesubjectinsured.Hisrelationwastothecompany,notto
itsgoods,andafterthefirehewasdirectlyprejudicedbythepaucityofthe
company'sassets,notbythefire.

Noauthorityhasbeenproducedforthepropositionthattheappellanthadany
insurableinterestinthetimberinanycapacity,andthebooksarefullofdecisions
anddictathathehadnone.Patersonv.Harris(28)andWilsonv.Jones(29)arevery
specialcases,andneitherisinpointhere.Intheformertherewasnopleatraversing
theallegationthattheplaintiffhadaninsurableinterest.TheCourt,construingthe
policyasonereallyexpressedtobeonthecable,dealtwiththecaseasoneinwhich
interestwasadmittedtherein,butitsdecisionofthecaseafterthisadmissionof
interestisnotadecisionthatashareholderassuchhasaninsurable,interestina
company'sassetsthemselves.Inthelatter,wherethepolicydescribedthesubject
matteroftheinsuranceinaveryobscuremanner,itwasheldthattheshareholder
insuredhadaninterestthathecouldinsureintheprofitsoftheadventureso
described,butitwasexpresslystatedthathehadnosuchinterestinhissharesinthe
company.

Thereremainsthecontentionthattherespondentswereincompetenttoraisethe
absenceofinsurableinterestuponthearbitration.Thisseemstometobeapure
misapprehension.Itissaidthatthedefendantscouldnothavegottheorder,which
stayedtheactionandreferredthematterindisputetoarbitration,iftheyhadstated
thattheymeanttorelyonthispointor,rather,iftheyhadnotactuallyintimatedthat
theywouldnot.Theargumentrestsonthecontentionthattoputtheplaintiffto
proofofaninsurableinterestisthesamethingaspleadingtheGamingAct,and
sayingthatthepolicyisnullandvoidandthatthereisnocontractforarbitrationor
anythingelse,butintruththedefendantshavesaidnosuchthing.Theletterswritten
beforetheorderwasmadedidnot,eitheraffirmativelyornegatively,showanything
ofthekind.Theplaintiffhadaverredaninsurableinterestinhispleading.The
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defendants,whomovedforastaybeforeputtinginadefence,simplydenied
liability,andtheissuesoraisedwasthematterindispute.ThecaseofJureidini(30)
isnotinpoint.Therepersons,whohadrepudiatedthewholecontractofinsurance,
afterwardsreliedonalimitedarbitrationclausecontainedinit,whichrequiredthe
amountpayabletobedeterminedbyarbitration,andsaidthat,untilhehadobtained
suchanaward,theplaintiffcouldnotcompletehiscase.Itwasheldthatthe
defendantscouldnotbothrepudiatethecontractintotoandrequiretheperformance
ofapartofit,whichonlybecameperformablewhenliabilitywasadmittedor
established.Thepresentcaseis.theconverse.Hereanarbitrationandawardare
conditionsprecedenttoanyactiontoenforcethepolicy.Thedefendantsdonot
repudiatethepolicyordisputeitsvalidityasacontractonthecontrary,theyrelyon
itandsaythat,accordingtoitsterms,expressandimplied,theyarerelievedfrom
liability:seeStebbing'scase(31)Woodallv.PearlAssuranceCo.(32)Itisafallacyto
saythattheyassertthepolicytobenullandvoid.Theydonotpleadormentionthe
GamingActandhavenoneedtorelyonit.Thecontractmadeinthepolicywas
that,iftheplaintiffcouldprove,amongotherthings,thathehad,atthetimeofloss,
suchaninsurableinterestinthetimberasthelawrecognizes,theinsurerswould
pay,andnototherwise.Nogamingcontractwasevermade,noranyagreementto
pay,interestornointerest.Itiswewhowouldmakethecontractagamingcontract,
ifweweretoaccepttheappellant'scontention.Therespondentssay,andtrulysay,
thatafireinsurancepolicyisnotanaleatorycontract,butisacontractofindemnity,
underwhichtheassuredmustaverandproveinterestatthetimeoftheloss.Thisis
apartofthelawofinsurance,quiteindependentlyoftheGamingAct,thoughthe
consequenceoffailuretoproveinterestisthesamenamely,thatthepolicyis
unenforceablebyanuninterestedassured.Itwasopento.thedefendantstoraisethis
caseatanytime.Underthepolicyarbitrationwastheonly.legalproceedingopen,
andtheorderwasmadeasamatterofcourse.Theinsurersgaveupnothingin
considerationofgettingtheorder,andallthedefencesremainedopentothem.
Estoppelhasbeenmentioned,buttherewasnone.Thedefendantsdidnotmakeany
representation,andtheplaintiffdidnotchangehispositiononthefaithofone.The
caseofYorkshireInsuranceCo.v.Craine(33)isdistinguishable.Itisacasein
which,underveryspecialcircumstances,theappellantswereheldtohaveestopped
themselvesbytheirconductfromclaimingtorelyononeoftheconditionsina
policy(p.553).HereIcanfindnoconductwhichdisentitlesthedefendantstoraise
anydefence,ofwhichthecaseadmits.IalsoagreewiththeCourtsbelowthatthe
appellantallowedthepointofabsenceofinteresttobetakenbeforethearbitrator
and,withoutmovingtodischargetheorderofreference,wentonandtookhis
chanceofsuccess,and,further,thatthereisnothingnowbeforeyourLordships
exceptthedeterminationofthequestionsstatedbythelearnedarbitratorinhis
award.Amotiontosettheawardasidefailed,andhasnotbeenappealed.MyLords,
Ithinkthisappealfails.

LORDWRENBURY.MyLords,thisappealmaybedisposedofbysayingthatthe
corporatorevenifheholdsallthesharesisnotthecorporation,andthatneitherhe
noranycreditorofthecompanyhasanypropertylegalorequitableintheassetsof
thecorporation.Further,Ihavereadandconcurinthejudgmentdeliveredbymy
nobleandlearnedfriend,LordSumner.Ithinktheappealshouldbedismissed.

LORDPHILLIMORE.MyLords,Iconcur.

OrderoftheCourtofAppealinNorthernIrelandaffirmed,andappealdismissed
withcosts.
Lords'Journals,April3,1925.

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7/25/2016 MacauravNorthernAssuranceCompanyLtd

Solicitorsfortheappellant:HerbertZ.Deane&Co.
Solicitorsfortherespondents:Bircham&Co.,forHoey&Denning,Dublin.

ENDNOTES:

(1)[1915]A.C.499,505.
(2)(1916)50Ir.L.T.114,110.
(3)(1909)478L.R.20,23.
(4)[1922]2A.C.541,647.
(5)[1917]2K.B.433,430,438.
(6)(1806)2Boo.P.N.B.269,302.
(7)(1849)14Q.B.634,645,646,659.
(8)(1872)L.R.7Q.B.299,302.
(9)(1873)L.R.8C.P.596,609.
(10)(1885)10App.Cas.263,270.
(11)1B.&S.336.
(12)L.R.1Ex.193,198L.R.2Ex.139,146,150.
(13)(1807)9But.72
(14)[1905]2L.R.555,562.
(15)(1802)2East,544.
(16)(1832)3B.&Ad.478,485.
(17)(1852)7Er.323.
(18)(1856)5E.&B.870.
(19)(1869)E.&E.652.
(20)(1876)1App.Cas.713
(21)(1886)12App.Cas.128.
(22)9East,72.
(23)[1905]2K.B.555,562.
(24)2Bos&P.N.B.269,302.
(25)1B.&8.336.
(26)L.R.1Fin193L.R.2Ex.139.
(27)L.R.1Ex.193L.R.2Ex.139.
(28)1B.&8.336.
(29)L.R.2Ex.139.
(30)[1915]A.C.499.
(31)[191712K.B.433.
(32)[1919]1K.B.593.
(33)[1922]2A.C.541.

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